SGX:LJ3

Stock Analysis Report

Executive Summary

OUE Limited, an investment holding company, develops, owns, and operates various real estate properties in Singapore, the People’s Republic of China, the United States, Japan, and internationally.

Rewards

Trading at 51.3% below its fair value

Earnings grew by 153.1% over the past year

Risk Analysis

Earnings have declined by -53.79% per year over past 5 years

Interest payments are not well covered by earnings

Large one-off items impacting financial results



Snowflake Analysis

Undervalued with acceptable track record.


Similar Companies

Share Price & News

How has OUE's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LJ3 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-4.6%

LJ3

-3.5%

SG Real Estate

-2.5%

SG Market


1 Year Return

-3.4%

LJ3

-4.1%

SG Real Estate

-1.1%

SG Market

Return vs Industry: LJ3 underperformed the SG Real Estate industry which returned -1.4% over the past year.

Return vs Market: LJ3 underperformed the SG Market which returned 0.7% over the past year.


Shareholder returns

LJ3IndustryMarket
7 Day-4.6%-3.5%-2.5%
30 Day-4.0%-2.5%-1.8%
90 Day0%0.9%-0.6%
1 Year4.7%-3.4%-1.1%-4.1%2.9%-1.1%
3 Year-12.0%-21.3%1.8%-6.1%11.5%-0.3%
5 Year-22.8%-34.5%-6.1%-17.9%8.9%-9.3%

Price Volatility Vs. Market

How volatile is OUE's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is OUE undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LJ3 (SGD1.5) is trading below our estimate of fair value (SGD3.08)

Significantly Below Fair Value: LJ3 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LJ3 is good value based on its PE Ratio (7.2x) compared to the Real Estate industry average (10.3x).

PE vs Market: LJ3 is good value based on its PE Ratio (7.2x) compared to the SG market (13.5x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate LJ3's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: LJ3 is good value based on its PB Ratio (0.3x) compared to the SG Real Estate industry average (0.5x).


Next Steps

Future Growth

How is OUE forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

4.8%

Forecasted Real Estate industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as OUE has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has OUE performed over the past 5 years?

-53.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LJ3 has a large one-off gain of SGD144.3M impacting its September 30 2019 financial results.

Growing Profit Margin: LJ3's current net profit margins (21.4%) are higher than last year (11.1%).


Past Earnings Growth Analysis

Earnings Trend: LJ3's earnings have declined by -53.8% per year over the past 5 years.

Accelerating Growth: LJ3's earnings growth over the past year (153.1%) exceeds its 5-year average (-53.8% per year).

Earnings vs Industry: LJ3 earnings growth over the past year (153.1%) exceeded the Real Estate industry -7.2%.


Return on Equity

High ROE: LJ3's Return on Equity (4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is OUE's financial position?


Financial Position Analysis

Short Term Liabilities: LJ3's short term assets (SGD1.2B) do not cover its short term liabilities (SGD1.4B).

Long Term Liabilities: LJ3's short term assets (SGD1.2B) do not cover its long term liabilities (SGD3.5B).


Debt to Equity History and Analysis

Debt Level: LJ3's debt to equity ratio (69.6%) is considered high.

Reducing Debt: LJ3's debt to equity ratio has increased from 48.8% to 69.6% over the past 5 years.

Debt Coverage: LJ3's debt is not well covered by operating cash flow (7.1%).

Interest Coverage: LJ3's interest payments on its debt are not well covered by EBIT (0.6x coverage).


Balance Sheet

Inventory Level: LJ3 has a low level of unsold assets or inventory.

Debt Coverage by Assets: LJ3's debt is not covered by short term assets (assets are 0.3x debt).


Next Steps

Dividend

What is OUE's current dividend yield, its reliability and sustainability?

1.39%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%2.5%markettop25%5.5%industryaverage3.2%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: LJ3's dividend (1.33%) isn’t notable compared to the bottom 25% of dividend payers in the SG market (2.5%).

High Dividend: LJ3's dividend (1.33%) is low compared to the top 25% of dividend payers in the SG market (5.41%).


Stability and Growth of Payments

Stable Dividend: LJ3 is not paying a notable dividend for the SG market, therefore no need to check if payments are stable.

Growing Dividend: LJ3 is not paying a notable dividend for the SG market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: LJ3 is not paying a notable dividend for the SG market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of LJ3's dividend in 3 years as they are not forecast to pay a notable one for the SG market.


Next Steps

Management

What is the CEO of OUE's salary, the management and board of directors tenure and is there insider trading?

6.3yrs

Average management tenure


CEO

Stephen Riady (59yo)

0yrs

Tenure

0

Dr. Stephen Riady (former name: Stephen Tjondro Riady) serves as Group Chief Executive Officer at OUE Limited since January 1, 2020. Dr. Riady is Chairman of HongKong Chinese Limited. Dr. Riady has been a  ...


Management Age and Tenure

6.3yrs

Average Tenure

49yo

Average Age

Experienced Management: LJ3's management team is seasoned and experienced (6.3 years average tenure).


Board Age and Tenure

9.8yrs

Average Tenure

58.5yo

Average Age

Experienced Board: LJ3's board of directors are considered experienced (9.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Stephen Riady (59yo)

    Executive Chairman & Group CEO

    • Ng Ngai

      Group Corporate Counsel & Company Secretary

      • Shu Lin Tan (46yo)

        Chief Executive Officer of OUE Commercial Reit

        • Tenure: 6.3yrs
      • Patrina Tan

        Senior Vice President of Retail Marketing & Leasing

        • Tenure: 11.8yrs
      • Victor Tan (52yo)

        Chief Executive Officer of First Reit

        • Ivan Lim (42yo)

          Chief Financial Officer

          • Isaac Chen

            Acting Chief Executive Officer of OUE Hospitality Trust

            • Tenure: 1.5yrs
          • Kum Yet

            Chief Executive Officer of OUE Lippo Healthcare Limited

            • Brian Riady

              Deputy CEO & Non-Independent Executive Director

              • Jackie Thia

                Company Secretary


                Board Members

                • Stephen Riady (59yo)

                  Executive Chairman & Group CEO

                  • Christopher James Williams (60yo)

                    Deputy Chairman

                    • Tenure: 9.8yrs
                  • Boon Ann Sin (61yo)

                    Lead Independent Director

                    • Tenure: 3yrs
                  • Eugene Chan (53yo)

                    Non-Executive Non-Independent Director

                    • Tenure: 9.8yrs
                  • Yi Shyan Lee (57yo)

                    Chairman of OUE Lippo Healthcare Limited & Chairman of OUE Hospitality Trust

                    • Tenure: 2.5yrs
                  • Kelvin Lo (58yo)

                    Independent Director

                    • Tenure: 13.5yrs
                  • Brian Riady

                    Deputy CEO & Non-Independent Executive Director

                    Company Information

                    OUE Limited's company bio, employee growth, exchange listings and data sources


                    Key Information

                    • Name: OUE Limited
                    • Ticker: LJ3
                    • Exchange: SGX
                    • Founded: 1964
                    • Industry: Diversified Real Estate Activities
                    • Sector: Real Estate
                    • Market Cap: S$1.334b
                    • Shares outstanding: 901.52m
                    • Website: https://www.oue.com.sg

                    Number of Employees


                    Location

                    • OUE Limited
                    • 50 Collyer Quay
                    • No. 18-01/02, OUE Bayfront
                    • Singapore
                    • 49321
                    • Singapore

                    Listings

                    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
                    OUE1DB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1992
                    LJ3SGX (Singapore Exchange)YesOrdinary SharesSGSGDJan 1992

                    Biography

                    OUE Limited, an investment holding company, develops, owns, and operates various real estate properties in Singapore, the People’s Republic of China, the United States, Japan, and internationally. The company operates through Property Investments, Hospitality, Property Development, Healthcare, and Fund management segments. It develops and manages assets across the commercial, hospitality, retail residential, and healthcare sectors. The company also engages in the rental of investment properties; development and sale of residential and other properties; operation of hotels; provision of hotel management services; and management of real estate investment trusts. In addition, it develops medical real estate, healthcare-related assets, and integrated mixed-use developments; and provides healthcare services. Further, the company is involved in the restaurant and investment trading operations; and operates and manages healthcare facilities, including 12 nursing homes located in cities across Japan and the 163-bed Wuxi New District Phoenix Hospital. The company was formerly known as Overseas Union Enterprise Limited and changed its name to OUE Limited in August 2013. The company was incorporated in 1964 and is based in Singapore. OUE Limited is a subsidiary of OUE Realty Pte. Ltd. 


                    Company Analysis and Financial Data Status

                    All financial data provided by Standard & Poor's Capital IQ.
                    DataLast Updated (UTC time)
                    Company Analysis2020/01/28 12:45
                    End of Day Share Price2020/01/28 00:00
                    Earnings2019/09/30
                    Annual Earnings2018/12/31


                    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.